Windfall Profits Tax - arbitrary and discriminatory

Some Commentators are toying with the idea of imposing a windfall profits tax on British Banks. We are not trying to defend what some may consider the indefensible but a few caveats merit consideration: if British Banks are to be taxed then all banks in the UK would have to be taxed. How would it affect the foreign banks with large operations in the UK? If they are not taxed this would distort competition. Banks such as Barclays and HSBC would also have every incentive to relocate to tax-friendlier regimes. And most importantly: in this age of heightened awareness of 'human rights' - how can a special tax on a single industry be justified? if a discriminatory tax such as a windfall tax on banks is imposed it would clearly be the duty of the bank's managements to take this case to the relevant Courts - in particular the European Court of Human Rights. And if banks can be taxed at will, what about football players, entertainers, lawyers and anyone else who one day catches the attention of freely-spending politicians?

EU competition policy arbitrary

When a major bank states that the EU may force 'unforeseen' asset sales alarm bells should be ringing. We have repeatedly stated on these pages that the competition policy is highly arbitrary and undemocratic. The people in charge (usually lifelong members of the employment club exclusively staffed by lifelong politicians or members of think tanks or universities) have no democratic mandate and are only subject to minimal and ineffective outside control. There are no proper procedures in place that make regulation transparent - otherwise how could it be that there could be unforeseen asset sales? If the rules would be clear every observer could predict exactly what measures would be taken to ensure that competition exists in the banking sector. Instead there are discriminatory rulings straight out from Central Command. We hope that the managements of the banks concerned have the guts to take every available legal step to delay the effect of measures that would harm their shareholders.

Ostentatious Consumption - good or bad?

Goldman Sachs' Lloyd Blankfein has asked his employees to avoid being seen as big spenders. The jury is out whether this is just a cosmetic PR gimmick or whether Goldman itself is in some doubt about the justice of last years highly selective bank rescues funded by the public. But however that may be, today's headline that a hedge fund manager is splashing out a reported £60 million for a super yacht may not help the alternative fund management industry in its effort to convince European legislators to enact more lenient industry regulations.